Did you knit a gauge swatch... and wash and dry it? Sometimes yarn will do weird things when it gets wet, which is why you should always treat your gauge swatch just as you would the finished article.
I too once knitted a sweater to the correct gauge, but when it was washed, it grew about 4+ sizes, and no amount of blocking or machine drying would fix it. I was very distraught, but I wouldn't have ever said I wouldn't knit a sweater again. I will not knit with that same yarn again though.
I'm sorry.. I know what you're going through. But please don't let it ruin knitting for you!